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Affiliate marketing is the process by which an individual or company, generally known as an affiliate, can earn a commission for marketing a business’ products or services and referring business their way. Sales and commission are usually tracked by an affiliate link from one website to another. More and more businesses are deciding to engage in affiliate marketing. This is because it is an easy way to market their business, increase brand awareness and track commission owed. In this article, we unpack key terms you should include in your affiliate marketing terms and conditions if you directly engage an individual or entity to promote your business.

Types of Affiliate Marketing

Some businesses will sign up to large affiliate networks, which are third party run affiliate marketing programs. Once you’ve signed up, any affiliate such as an influencer or blogger can use your affiliate link and market your products or services for a commission. The third party platform will manage all affiliate links, payments and affiliates. You will have limited control over who is associated with your brand. However, this saves you the hassle of having to get too bogged down in the marketing side of things.

Other businesses may generate their own affiliate links. These businesses can then provide them to individuals or businesses that they would like to promote their business and refer customers to them. This article focuses on this specific type of affiliate marketing.

Key Terms To Include

Services

Your terms and conditions should set out what promotional services you would like the affiliate to promote. For example, you should consider whether you want the affiliate to promote your business on a specific platform or any specific promotion you would like them to market. You should also consider, particularly if they are posting their promotion to any form of social media, how long they should keep the relevant promotion live.

Commission

One of the great perks of affiliate marketing is the ability to track sales through affiliate links. Your terms and conditions should set out your expectations regarding the affiliate’s obligation to embed your affiliate link into their promotions. From there, you should be able to track how many sales the affiliate generated. Your terms and conditions should determine how you will calculate the commission and how often you will pay it out. Take the time to consider implications. For example, consumers may purchase products or services from you and then request a refund. What if you have already passed on commission to an affiliate?

Ownership

Generally, if someone promotes your brand, there will probably be intellectual property created. Indeed, it may be photos, videos or any other form of promotional material. As such, your terms and conditions should define who owns that material and what rights the other party will have to use it. You should also consider whether you want to approve a promotion that an affiliate has created before it goes live.

Branding

Suppose you provide any of your branding to an affiliate, such as your trade mark or any other material. In that case, you must use your terms and conditions to grant the affiliate a licence to use such branding. The benefit of granting a licence is that you can put limitations around what they use branding for. For example, you may limit their use of your branding to the duration of the term. Furthermore, you may state they can only use it for the purpose of providing the services. Such services should be set out in the terms and conditions. In addition, if the agreement is terminated for any reason, or the affiliate uses the branding for the wrong reasons, you will be able to revoke the licence.

Warranties

When someone else is promoting your brand, you rely on them to promote a positive perception of your brand. In the context of your affiliate agreement, a warranty is a list of promises your affiliate makes to you. The types of warranties you will want to incorporate are as follows. You should ensure they conduct business in a way that reflects favourably on you. Furthermore, you should ensure they do not make any false or misleading statements concerning you. Finally, you must make it clear they should not engage in any obscene, inappropriate, offensive, illegal or intolerant behaviour.

Liability

Of course, another reason to have a set of terms and conditions with your affiliates is to manage any risk. While you may take on less risk than the actual affiliate, you still want the affiliate to be responsible for some things, including the extent to which they are liable if they infringe a third party’s intellectual property and you are sued for it.

Key Takeaways

If you would like to promote your business through affiliate marketing, you should consider your options. You will do this by engaging affiliates directly or through a third party platform. If you engage them directly, you should put together a set of affiliate marketing terms and conditions to govern your relationship with the affiliate. This will help ensure each party is on the same page and help reduce the chance of a dispute.

If you need assistance with affiliate marketing arrangements, call LegalVision’s commercial contracts lawyers on 1300 544 755 or fill out the form on this page.

Frequently Asked Questions

What is affiliate marketing?

Affiliate marketing is the process by which an individual or company, generally known as an affiliate, can earn a commission for marketing a business’ products or services and referring business their way. Sales and commission are usually tracked by an affiliate link from one website to another.

What terms should I include in affiliate marketing terms and conditions?

Your should ensure your affiliate marketing terms and conditions cover services, commission, ownership, branding, warranties and liability.

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